Of roughly $250 million raised for and against 17 ballot measures coming before California voters in November, more than a quarter of that amount — about $70 million — has been contributed by deep-pocketed drug companies to defeat the state’s Drug Price Relief Act.

They work by laser ablation. Basically, the laser is bright enough and focused enough that anything that absorbs the light strongly will get heated to a plasma.

A CO2 laser can put out ~1000 watts of power in the infrared (10 µm) that can be focused to a strip or spot smaller than a millimeter. A material that absorbs at that wavelength will be heated very quickly. At lower powers you can use this for laser engraving. But for rust removal you can dump enough heat into the rust to heat it to a plasma.

Now, why doesn't the laser continue to burn away the iron underneath the rust? Because metals reflect light very well, especially in the infrared. I found this plot showing how at 10 µm even iron makes a very good mirror. So once the rust burns off, the laser reflects off the iron rather than heating it up.

edit I talked about CO2 lasers as an example, but I think many rust removal systems actually use diode pumped YAG lasers (1.06 µm wavelength). See here for instance. The mechanism is still the same (laser ablation). A YAG laser will be less damaging to skin (since water absorbs less), but I would be more nervous about eye damage (it is harder to filter out 1.06 µm light from visible light compared to 10 µm).